DELiA*s, Inc. Announces Third Quarter 2011 Results

Net loss for the first nine months of fiscal 2011 decreased to $18.5 million, or $0.59 per diluted share, compared to a net loss of $22.3 million, or $0.72 per diluted share, for the first nine months of fiscal 2010. Included in the first nine months of fiscal 2010 was the aforementioned goodwill impairment charge of $7.6 million, or $0.24 per diluted share. The net loss for the first nine months of fiscal 2011 includes a benefit for income taxes of $0.9 million, or $0.03 per diluted share, compared to a benefit of $6.0 million, or $0.19 per diluted share, recorded in the first nine months of fiscal 2010.

Conference Call and Webcast Information

A conference call to discuss third quarter 2011 results is scheduled for Tuesday, November 22, 2011 at 10:00 A.M. Eastern Time. The conference call will be webcast live at www.deliasinc.com. A replay of the call will be available until December 22, 2011 and can be accessed by dialing [phone] and providing the pass code number 60550902.

During the conference call, the Company may discuss and answer questions concerning business and financial developments and trends. The Company’s responses to questions, as well as other matters discussed during the conference call, may contain or constitute information that has not been disclosed previously.

About dELiA*s, Inc.

dELiA*s, Inc. is a direct marketing and retail company comprised of two lifestyle brands primarily targeting teenage girls and young women. Its brands – dELiA*s and Alloy – generate revenue by selling apparel, accessories, footwear and room furnishings to consumers through direct mail catalogs, websites, and dELiA*s mall-based specialty retail stores.

Forward-Looking Statements

This announcement may contain forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding our expectations and beliefs regarding our future results or performance. Because these statements apply to future events, they are subject to risks and uncertainties. When used in this announcement, the words “anticipate”, “believe”, “estimate”, “expect”, “expectation”, “should”, “would”, “project”, “plan”, “predict”, “intend” and similar expressions are intended to identify such forward-looking statements. Our actual results could differ materially from those projected in the forward-looking statements. Additionally, you should not consider past results to be an indication of our future performance. For a discussion of risk factors that may affect our results, see the “Risk Factors That May Affect Future Results” section of our filings with the Securities and Exchange Commission, including our annual report on Form 10-K and quarterly reports on Form 10-Q. We do not intend to update any of the forward-looking statements after the date of this announcement to conform these statements to actual results, to changes in management's expectations or otherwise, except as may be required by law.

dELiA*s, Inc.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value and share data)
(unaudited)
		October 29, 2011				October 30, 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	15,778			$	14,356
Inventories, net			41,655				41,838
Prepaid catalog costs			3,654				3,934
Restricted cash			-				7,285
Deferred income taxes			-				1,138
Other current assets			3,696				12,393
TOTAL CURRENT ASSETS			64,783				80,944
PROPERTY AND EQUIPMENT, NET			44,843				52,444
GOODWILL			4,462				4,462
INTANGIBLE ASSETS, NET			2,419				2,419
OTHER ASSETS			852				139
TOTAL ASSETS		$	117,359			$	140,408
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	21,742			$	22,559
Accrued expenses and other current liabilities			16,653				21,257
Income taxes payable			891				825
TOTAL CURRENT LIABILITIES			39,286				44,641
DEFERRED CREDITS AND OTHER LONG-TERM LIABILITIES			11,964				11,633
TOTAL LIABILITIES			51,250				56,274
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred Stock, $.001 par value; 25,000,000 shares authorized,
none issued			-				-
Common Stock, $.001 par value; 100,000,000 shares
authorized; 31,432,531 and 31,312,591 shares issued
and outstanding, respectively			31				31
Additional paid-in capital			99,081				99,292
Accumulated deficit			(33,003	)			(15,189	)
TOTAL STOCKHOLDERS' EQUITY			66,109				84,134
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	117,359			$	140,408

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
			For the Thirteen Weeks Ended
			October 29, 2011							October 30, 2010
NET REVENUES			$	58,067			100.0	%		$	60,610			100.0	%
Cost of goods sold				39,336			67.7	%			39,838			65.7	%
GROSS PROFIT				18,731			32.3	%			20,772			34.3	%
Selling, general and administrative expenses				23,081			39.7	%			24,450			40.3	%
Impairment of goodwill				-			0.0	%			7,611			12.6	%
Other operating income				(122	)		-0.2	%			(63	)		-0.1	%
TOTAL OPERATING EXPENSES				22,959			39.5	%			31,998			52.8	%
OPERATING LOSS				(4,228	)		-7.3	%			(11,226	)		-18.5	%
Interest expense, net				(171	)		-0.3	%			(91	)		-0.2	%
LOSS BEFORE INCOME TAXES				(4,399	)		-7.6	%			(11,317	)		-18.7	%
Provision (benefit) for income taxes				26			0.0	%			(1,655	)		-2.7	%
NET LOSS			$	(4,425	)		-7.6	%		$	(9,662	)		-15.9	%
BASIC AND DILUTED LOSS PER SHARE:
NET LOSS PER SHARE			$	(0.14	)					$	(0.31	)
WEIGHTED AVERAGE BASIC AND DILUTEDCOMMON SHARES OUTSTANDING				31,209,737							31,105,983

dELiA*s, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
(unaudited)
		For the Thirty-Nine Weeks Ended
		October 29, 2011							October 30, 2010
NET REVENUES		$	151,560			100.0	%		$	153,784			100.0	%
Cost of goods sold			104,381			68.9	%			104,976			68.3	%
GROSS PROFIT			47,179			31.1	%			48,808			31.7	%
Selling, general and administrative expenses			66,406			43.8	%			69,587			45.2	%
Impairment of long-lived assets			-			0.0	%			7,611			4.9	%
Other operating income			(194	)		-0.1	%			(301	)		-0.2	%
TOTAL OPERATING EXPENSES			66,212			43.7	%			76,897			50.0	%
OPERATING LOSS			(19,033	)		-12.6	%			(28,089	)		-18.3	%
Interest expense, net			(394	)		-0.3	%			(261	)		-0.2	%
LOSS BEFORE INCOME TAXES			(19,427	)		-12.8	%			(28,350	)		-18.4	%
Benefit for income taxes			(921	)		-0.6	%			(6,015	)		-3.9	%
NET LOSS		$	(18,506	)		-12.2	%		$	(22,335	)		-14.5	%
BASIC AND DILUTED LOSS PER SHARE:
NET LOSS PER SHARE		$	(0.59	)					$	(0.72	)
WEIGHTED AVERAGE BASIC AND DILUTED COMMON SHARES
OUTSTANDING			31,209,737							31,103,574

dELiA*s Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
		For the Thirty-Nine Weeks Ended
		October 29, 2011				October 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(18,506	)		$	(22,335	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			8,624				7,835
Stock-based compensation			571				651
Impairment of goodwill			-				7,611
Changes in operating assets and liabilities:
Inventories			(9,630	)			(8,136	)
Prepaid catalog costs and other assets			6,265				(935	)
Restricted cash			8,268				255
Income taxes payable			149				92
Accounts payable, accrued expenses and other liabilities			(4,973	)			(6,674	)
Total adjustments			9,274				699
NET CASH USED IN OPERATING ACTIVITIES			(9,232	)			(21,636	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(3,064	)			(5,659	)
NET CASH USED IN INVESTING ACTIVITIES			(3,064	)			(5,659	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of employee stock options			-				5
NET CASH PROVIDED BY FINANCING ACTIVITIES			-				5
NET DECREASE IN CASH AND CASH EQUIVALENTS			(12,296	)			(27,290	)
CASH AND CASH EQUIVALENTS, beginning of period			28,074				41,646
CASH AND CASH EQUIVALENTS, end of period		$	15,778			$	14,356

dELiA*s, Inc.
SELECTED OPERATING DATA
(in thousands, except number of stores)
(unaudited)
		For The Thirteen Weeks Ended									For The Thirty-Nine Weeks Ended
		October 29, 2011					October 30, 2010				October 29, 2011					October 30, 2010
Channel net revenues:
Retail			$	36,186			$	37,203				$	89,589			$	87,538
Direct				21,881				23,407					61,971				66,246
Total net revenues			$	58,067			$	60,610				$	151,560			$	153,784
Comparable store sales				(1.7	%)			(0.4	%)				1.6	%			(4.8	%)
Catalogs mailed				9,356				11,488					25,940				29,150
Inventory - retail			$	24,501			$	23,595				$	24,501			$	23,595
Inventory - direct			$	17,154			$	18,243				$	17,154			$	18,243
Number of stores:
Beginning of period				115				115					114				109
Opened				1		*		-					3		*		9		**
Closed				2		*		-					3		*		3		**
End of period				114				115					114				115
Total gross sq. ft @ end
of period				437.2				440.4					437.2				440.4
* Totals include one store that was closed, remodeled and reopened in the second quarter of fiscal 2011, and one store that was closed, remodeled and reopened in the third quarter of fiscal 2011.
** Totals include one store that was closed, remodeled and reopened in the second quarter of fiscal 2010, and one store that was closed and relocated to an alternative site in the same mall during the second quarter of fiscal 2010.

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